Long Term Care Insurance Myths

Long term care insurance is not widely used and commonly misunderstood. In this article, we will debunk some long term care insurance myths that can help you understand it better.

1. It is Only Good for Nursing Home Care

Using long term care insurance for nursing home care is very uncommon. According to the American Association for Long Term Care Insurance, 73% of claims being as a home care. Only 18% begin with assisted living facilities and only 9% begin with nursing home care. By purchasing long term care insurance, you open up the options for the kind of care you want to receive.

2. You Are Required to Use a License Care Provider and Submit Receipts

When you purchase a reimbursement policy, the policy will only pull the billed rate for services covered under the policy. You must use a licensed provider and submit bills and receipts for coverage. Many people do not want to deal with this and now there is another option-a cash indemnity policy. With this type of policy, the insurance company will pay out the full benefit amount to the owner. This money can be spent without restriction on whatever medical services you need.

3. You Will Lose All Your Premiums if the Policy is Not Used

There are two ways you can recoup your premiums from a used policy. First is to purchase long term care insurance that is attached to a financial product, like life insurance. With this type of policy, a death benefit will be paid to your beneficiaries. Second, you can purchase a return of premium rider. This will return your premiums to a beneficiary upon your death.

4. With Rates Going Up I May Not Be Able to Afford My Policy

Try going with a combo or hybrid policy. With these policies, premiums can never go up and benefits can never be reduced. You also can utilize a reduced paid-up policy. This means if you can no longer afford premiums the cumulative premiums that you already paid will be credited pro rate to calculate a new benefit amount that will be considered paid up.

5. What is the Point if We Cannot Afford Two Policies

Instead of purchasing two separate policies, you can purchase a joint long term care insurance policy. This type of policy provides a benefit pool that you and your spouse can access, even at the same time. This type of policy is typically more affordable than two separate policies.

6. The Government Will Cover My Care

It is a common misconception that Medicare will cover long term care, when that is not the case. Your care may be covered by Medicaid, but you have to qualify and must meet their very low asset and income requirements. Additionally, Medicaid typically covers nursing home care, not at home care.

Debunking Long Term Care Insurance Myths

By clearing up these 6 long term care insurance myths you can put yourself in a better situation to purchase a policy that is correct for your needs. You can also meet with a qualified insurance agent who can help you through the process.

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